The biggest event in the cryptocurrency world recently was the declaration of the Chinese authorities to turn off the exchanges which cryptocurrencies are traded. Because of this, BTCChina, one of many largest bitcoin exchanges in China, said that it could be ceasing trading activities by the finish of September. This news catalysed a sharp sell-off that left bitcoin (and other currencies such as Etherium) plummeting approximately 30% below the record highs which were reached earlier this month.
So, the cryptocurrency rollercoaster continues. With bitcoin having increases that surpass quadrupled values from December 2016 to September 2017, some analysts predict that it could cryptocurrencies can recover from the recent falls. Josh Mahoney, market analyst at IG comments that cryptocurrencies’ “past experience tells us that [they] will likely brush these latest challenges aside”.
However, these sentiments don’t come without opposition. Mr Dimon, CEO of JPMorgan Chase, remarked that bitcoin “isn’t going to work” and that it “is a fraud… worse than tulip bulbs (in mention of the Dutch ‘tulip mania’ of the 17th century, recognised as the world’s first speculative bubble)… that will blow up”. He would go to the extent of saying that he would fire employees who have been stupid enough to trade in bitcoin.
Speculation aside, what is actually going on? Since China’s ICO ban, other world-leading economies are going for a fresh look into the way the cryptocurrency world should/ could be regulated in their regions. Rather than banning ICOs, other countries still recognise the technological great things about crypto-technology, and are looking at controlling the market without completely stifling the growth of the currencies. The big issue for these economies would be to figure out how to do that, because the alternative nature of the cryptocurrencies don’t allow them to be classified under the policies of traditional investment assets.
Some of these countries include Japan, Singapore and the US. These economies seek to determine accounting standards for cryptocurrencies, mainly to be able to handle money laundering and fraud, which have been rendered more elusive as a result of crypto-technology. Yet, most regulators do recognise that there is apparently no real benefit to completely banning cryptocurrencies due to the economic flows that they carry along. Also, probably because it is practically impossible to shut down the crypto-world so long as the internet exists. Regulators can only focus on areas where they may be in a position to exercise some control, which appears to be where cryptocurrencies meet fiat currencies (i.e. the cryptocurrency exchanges).
While cryptocurrencies appear to come under more scrutiny as time progresses, such events do benefit some countries like Hong Kong. Since the Chinese ICO ban, many founders of cryptocurrency projects have already been driven from the mainland to the city. Aurelian Menant, CEO of Gatecoin, said that the business received “a high number of inquiries from blockchain project founders based in the mainland” and that there’s been an observable surge in the number of Chinese clients registering on the platform.
Looking Bitcoin Cash Developer Guide , companies like Nvidia have expressed positivity from the event. They claim that this ICO ban is only going to fuel their GPU sales, because the ban will likely raise the demand for cryptocurrency-related GPUs. With the ban, the only way to obtain cryptocurrencies mined with GPUs would be to mine them with computing power. As such, individuals looking to obtain cryptocurrencies in China now have to obtain additional computing power, instead of making straight purchases via exchanges. Essentially, Nvidia’s sentiments is that this is not a downhill spiral for cryptocurrencies; actually, other industries will receive a boost as well.
In light of all commotion and debate surrounding cryptocurrencies, the integration of the technology in to the global economies appear to be materialising hastily. Whether or not you believe in the foreseeable future of the technology, or believe that it is a “fraud… that will blow up”, the cryptocurrency rollercoaster is one worth your attention.